LeBron James: Savior of South Florida?
By Colin Ryan
I’m no basketball aficionado, so I can’t claim to know much about LeBron James’ recent decision to leave the Cleveland Cavaliers for the Miami Heat–except, of course, what every form of media has bombarded me with ad nauseum for the last few weeks, including suggestions that the move was in part motivated by the real estate market. But when the owner of your former team has been fined $100,000 by the NBA for comments made in an open letter about your decision, I think it’s safe to say reactions have been mixed.
Still, while Cavs fans burn James’ jersey in effigy, it’s safe to say that residents in South Florida are pleased as punch about their new acquisition for a number of reasons, not all of which have to do with basketball. In a recent article for the Miami Herald, David J. Neal (et al.) notes that LeBron’s arrival has apparently already delivered a shot in the arm to the Miami real estate market, even convincing one buyer to shell out an extra $100k on a condo near the American Airlines Arena.
But how much of an economic impact can one man have? As far as Justin Miller of the Atlantic is concerned, not much:
“The owners of the team and its arena will pocket most of what is reaped by LeBron and company (and don’t forget the NBA gets a cut). So some more service workers at the arena get hired and bars sell more beer for several months of the year — that doesn’t come close to millions or billions in economic help for an entire metropolis.”
Miller is absolutely right about where most of the new revenue is headed, and his conclusions are regrettable; but I think he underestimates the economic power of morale. Let’s look at his example of bars selling more beer, for instance. Bars that take in more customers can afford to expand and hire new workers. The companies that make the beer, especially microbreweries, will also see increased opportunities for expansion. Whether they come from 20 miles or 2000 miles away, those who flock to Miami to see LeBron will be more willing than ever to make an event of their visit, thanks to the pageantry surrounding the man. This means that restaurants and hotels will see increased business. Finally, let’s not forget the NBA’s monopoly on style. Whether it’s a crappy five-dollar silkscreened t-shirt at Wal-Mart or a premium LeBron jersey at…Wal-Mart, people will be eager to show their support for the Heat, and that desire will translate into jobs in the retail industry. This may not seem like the best kind of job growth, but the fact is that except for health services (15 million) and manufacturing (14.7 million), retail trade (14.6 million) and accommodation/food services (10.1 million) employ the most workers of any sector of the U.S. economy. When we consider how important tourism is for Miami, those numbers are hard to ignore.
At this point, we may feel a few pangs of guilt about the future of the city that LeBron is leaving behind. But if things aren’t exactly looking up for Cleveland, we can at least take solace in the fact that when it comes to LeBron moving out, the city may very well have the last laugh, however mirthless. After all, how many people do you know who are looking to buy a 35,000 sq. ft. home outside of Cleveland with a bowling alley, a casino, and a barbershop?
Published on July 14, 2010